Capital Markets Party Like It's 1989

Record-low junk-bond yields fuel a new deal frenzy. Will this one turn out better?

Breaking up can be hard to do, and expensive for both partners. Consider the ties between stocks and junk bonds, a relationship that, while may not be unraveling, is showing strains. Blame it on partying that is spurring a lot of linking-up.

While the main measures of equities approach record highs, with the Dow Jones Industrial Average hovering around the 14,000 mark, prices of high-yield bonds have retreated from their peaks as their yields have moved up from their historic lows. The divergence is noteworthy because...